LITTLE ROCK, Ark. — Gov. Sarah Huckabee Sanders announced a series of retroactive tax cuts on Thursday during a news conference, which included leaders of the General Assembly.
"During my campaign, I committed to cutting our state's tax rates responsibly," Sanders said. "Today, we're delivering on that promise."
The governor announced SB549, which would cut personal income tax by $100 million and corporate income tax by $24 million.
The proposal would drop the top individual income tax rate from 4.9% to 4.7% and the top corporate income tax rate from 5.3% to 5.1%.
"As long as we continue to have some of the highest tax rates in the region," Sanders said. "The simple truth is that the talent, the families and the businesses we create will leave our state for greener pastures... this bill is aimed at the hardworking Arkansans hurting most from inflation."
According to Sanders, the tax cuts cover roughly 1.1 million middle-income Arkansans and will be retroactive, meaning they will go into effect immediately starting January 1, 2023.
"I don't think [the relief] can come fast enough," Sanders said. "Arkansans under Joe Biden's reckless spending spree in Washington, the out of control inflation, the rising cost of groceries and gas, Arkansans need relief, and they need it quickly."
Sanders said Texas and Tennessee have a fast-growing population and a healthy economy because they have no state income tax. She also mentioned how Missouri and Mississippi have cut their tax rates in recent years.
"If Arkansas doesn't keep up, we stand to lose out on even more growth," Sanders said. "Today's incremental tax cut is a continuation of the recent tax cuts the legislature has made to our state's tax rate. We have to continue to work until we can wipe the income tax off the books... Arkansas will become a low-tax state, we will compete with our neighbors on a level playing field and we will build an economy that gives every Arkansan an opportunity to succeed."
On Monday, Sanders introduced The Protect Arkansas Act. This proposal would retool the duration of prison sentences, add more prison beds with a new facility and provide funding to hire correction officers and staff.
The Protect Arkansas Act passed through Senate Committee on Wednesday.